Millions of tonnes of carbon emissions could be saved and fuel bills cut under new Liberal Democrat proposals to make Britain's homes more energy efficient.

Housing is crucial to combating climate change, as it is responsible for over a quarter of carbon emissions. Lib Dem proposals could save 31 millions of tonnes of CO2, more carbon than is produced annually by all the cars on Britain's roads. Currently, British homes waste an average of £385 a year more in energy compared to Sweden.

The Climate Change Starts at Home proposals would:

• Set tough new GreenHouse standards for new homes which would cut fuel bills and soon pay for themselves.

• Create a system of 'energy mortgages' which would encourage energy efficiency improvements on existing houses. Three quarters of the homes we will use in 2050 have already been built so a major programme of refurbishment is needed. Under the current rate of Government schemes, it would take 125 years to refurbish existing homes.

• Introduce a 'cap and trade' scheme for energy companies - they will maximise their profits by helping their customers become more energy efficient.

Speaking on Monday while visiting Russell Smith's Carshalton house (this was built in 1870 and is undergoing improvements to make it more energy efficient), Liberal Democrat Leader Menzies Campbell said: "Tackling climate change requires us to take action now - the Stern Review made it clear that we simply cannot afford to wait. People are paying higher fuel bills because their homes too easily lose energy. Our proposals will help people save the environment and cut bills. Creating a national scheme of 'energy mortgages' will allow people to use the money saved from having an energy efficient home to invest in the necessary improvements."

Carshalton and Wallington residents have been among the first to take climate change busting steps as evidenced by energy-friendly projects undertaken in Carshalton.

Speaking on the strides made by the local community, Tom Brake MP, Liberal Democrat for Carshalton and Wallington said, "Carshalton is a great place to find cutting-edge environmental design, first we had Bed Zed in Hackbridge, now we have Russell Smith and Parity Projects with their demonstration eco-home in Carshalton. It just shows that where there is a will there is a way."